Talking with the taxman about avoidance

Phil Cunnington

The last couple of years has seen numerous stories detailing how enormous, multinational businesses have avoided paying taxes in the UK.

Billions of pounds in taxable income is siphoned offshore, out of reach of the taxman, where it can be represented as losses, or loans, or payments for logos and branding.

They’re all at it – Amazon, Facebook, Crickhowell, Starbucks... hang on a minute. Crickhowell? The small Welsh town in the Brecon Beacons?

Well, yes. Encouraged by Heydon Prowse – one the of the satirists behind The Revolution Will Be Televised – the small businessholders of Crickhowell decide to stick it to the man by copying the tax-avoiding antics of their multinational rivals.

Before you get all hot under the collar and start blustering about how they’re all at it, and how Inspector Knacker should start feeling a few collars, what they do in The Town That Took on the Taxman (BBC2, Wednesday, 9pm), was all completely legal.

And the point was not to line their own pockets, but to show that small and medium-sized businesses are not competing on a level playing field.

While multinational corporations get away with paying little to no tax – Amazon, for example, paid just £11.9m in corporation tax on £5.3bn in UK sales last year –the little guys get squeezed for the full amount, and penalised hard if they don’t pay it.

The shocking thing was not really the amount of money leaving the country, but the ease with which it can be achieved.

Signing a few forms in the Isle of Man and the Netherlands meant the businesses of Crickhowell effectively paid themselves for the rights to use logos and branding, money which was sent between the territories before arriving back in South Wales in the form of dividends or loans.

By the end, the Fair Tax Town idea had spread, and I was spitting feathers.

The Government claims to be on the side of the small business. Well, it’s time they started showing it.